Yes Bank fiasco: ED summons Anil Ambani in probe against Rana Kapoor

Anil Ambani’s companies are struggling with debts and some of them like RCom have been referred to the National Company Law Tribunal (NCLT). The Ambani scion has now been summoned by the Enforcement Directorate (ED) which is probing Rana Kapoor, the former CEO of Yes Bank. Several charges have been brought on the Yes Bank founder including money laundering. The Anil Ambani connection is that Yes Bank had loaned around ₹14,000 crore to Anil Ambani’s companies.

As of now, the only remark from one of the ED sleuths is that they are probing the money laundering charge and calling in all large borrowers to know if they were also involved in paying back any funds to the promoter cum CEO for sanctioning the loans in the first place.

Ambani is expected to be present at ED’s Mumbai office on Monday, March 16, to answer questions from the probe team on this.

According to some reports, there has been a complaint that out of the loans that Yes Bank gave to Dewan Housing Finance Limited (DHFL), which is itself under investigation right now, some moneys were lent to companies associated with Rana Kapoor /his family members by DHFL, indicating there may be some kind of a quid pro quo involved. Transactions like these are now being dug up and investigated.

In the case of Anil Ambani, a large portion of the ₹14,000 crore exposure of Yes Bank to his companies was to the construction arm and the ED official will want to question him on the exact process employed in  applying for and obtaining the loans.  

The ironical aspect of Yes Bank’s financial muddle is that most of the borrowers in its list are companies like Dewan Housing Finance (DHFL), Infrastructure Leasing & Financial Services (IL&FS), Essel Group, CG Power, Cox and Kings, and Radius Developers. Many of these companies are currently being investigated for various financial irregularities. The ED is said to have drawn up a list of top five borrowers for inquiry.

The Reliance Group has issued a public statement denying any wrongdoing on its part in the Yes Bank loans.

The focus of ED’s probe are the 78 different companies that have direct or indirect connection with Rana Kapoor and to check if the ₹30,000 crore bad debts of the bank lead to any of these 78 companies. Kapoor has already been taken into custody by the ED.

The fact that some of the defaulters of Yes Bank are distressed companies themselves has been pointed out by Finance Minister Nirmala Sitharaman herself in one of her media interactions.